Publications

UNINSURED MOTORIST COVERAGE -
A SHORT SUMMARY

PRESENTED BY:
WILLIAM S. SUTTON
(McLain & Merritt)

UNINSURED MOTORIST COVERAGE - A SHORT SUMMARY
Uninsured motorist coverage is just what it says it is, a substitute for liability coverage where a culpable third party is either uninsured, underinsured, unknown, or cannot be located. The applicable Code Section is O.C.G.A. § 33-7-11. Uninsured motorist coverage is first party coverage, not third party coverage. The purpose of UM coverage is to put the injured party in the same place in which he would have been had the culpable driver had coverage. State Farm Mutual Ins. Co. v. Kuharik, 179 Ga. App. 568, 347 S.E.2d 281 (1986). What is somewhat different from other types of first party coverage is that, with UM coverage, the insurer has no obligation to pay benefits until the operator or owner of the un/underinsured vehicle is found to be legally liable.

WHAT IS AN "UNINSURED" VEHICLE OR DRIVER?
Automobile liability insurance issued, or delivered, in this State for any motor vehicle, which is garaged or principally used in this State, must contain an endorsement providing the insured with coverage for all sums that the insured is legally entitled to recover as damages from the owner or operator of an "uninsured" motor vehicle. The term "uninsured" is defined by statute to include an insured motorist, a underinsured motorist, a Joe Doe motorist, a phantom vehicle or a motorist who cannot be located and served. O.C.G.A. § 33-7-11. Drivers facing coverage denials or drivers whose insurer is, or becomes, insolvent, are also "uninsured." O.C.G.A. § 33-7-11(b)(1)(iii)(iv).

Unless the insured rejects UM coverage in writing, all policies issued in Georgia must provide at least $15,000/$30,000/$10,000 in uninsured motorist coverage. Larger amounts of coverage may be purchased at the option of the insured, but these amounts are directly related to the amount of automobile liability insurance being purchased by the insured. For example, where an insured purchases liability coverage of $50,000/$100,000/$25,000, the insured is limited to uninsured motorist coverage in the same amounts. O.C.G.A. § 33-7-11(a)(2). Also at the option of the insured, UM coverages may include deductible amounts of $250, $500 or $1,000. Where the insured selects a deductible, the premium must be reduced. O.C.G.A. § 33-7-11(a)(2)(D).

The Georgia Uninsured Motorist Act defines an insured as "the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise; any person who uses, with the express or implied consent of the named insured, the motor vehicle to which the policy applies; a guest in such motor vehicle to which the policy applies; or the personal representatives of any of the above." O.C.G.A. § 33-7-11(b)(1)(B)(2).

As can be seen from a careful reading of the above Code Section, there are two (2) classes of insureds under the uninsured motorist statute. There are the named insured, a resident spouse of the named insured, and resident relatives of either the named insured or the spouse while in "any motor vehicle or otherwise." The second class of insureds is made up of permissive users who are only "insured" when operating the insured vehicle and guests who are only "insureds" when riding in the insured vehicle. The first category is broader to the extent that the named insured and resident relatives, etc., are insured whether in the insured vehicle or another non-owned/non-insured vehicle. The second, and more limited class of insureds, requires presence in a vehicle listed on the policy from which UM benefits are sought.

Corporations do not have resident relatives or family members. Pennsylvania Lumbermen's Mutual Ins. Co. v. Haney, 189 Ga. App. 216, 375 S.E.2d 293 (1988). Even an officer or director of a corporation is not insured under the corporation's UM coverage for injuries sustained while operating a non-owned, non-listed vehicle. Chastain v. USF&G, 199 Ga. App. 86, 403 S.E.2d 889 (1991).

WHAT IS AN "INSURED" EVENT?
Most uninsured motorist endorsements state that to be covered, an injury must arise out of the ownership, maintenance or use of an uninsured motor vehicle. Further findings then become fact-specific. Hartford Accident & Indem. Co. v. Booker, 140 Ga. App. 3, 230 S.E.2d 70 (1976). Examples of cases decided under this particular language range from situations where a shotgun has gone off in a pickup truck while riding down the road and injured an occupant, to other situations where a driver was struck and killed by a car after parking and getting out of his car, and then walking across the street. In the first situation, the Court of Appeals found that the injury arose from the "use" of a motor vehicle. In the second situation, the Court of Appeals found that the driver's "use" of his motor vehicle had stopped when he was struck and killed. Insurance Company of N.A. v. Dorris, 161 Ga. App. 46, 288 S.E.2d 856 (1982); and Bernard v. Nationwide Mut. Fire Ins. Co., 206 Ga. App. 519, 426 S.E.2d 29 (1992). In some cases, a "but for" test has been used. In other words, "had it not been for the use of a motor vehicle," the injury would not have occurred.

WHAT IS AN "UNINSURED" VEHICLE?
While the term "use, maintenance or ownership of a motor vehicle" is not defined by statute, the term "uninsured motor vehicle" is defined by statute. O.C.G.A. § 33-7-11(a)(1). The statutory definition is "a motor vehicle, other than a motor vehicle owned by or furnished for the regular use of the named insured, the spouse of the named insured, and while residents of the same household, the relative of either, as to which there is: (i) No bodily injury liability insurance and property damage liability insurance; (ii) Bodily injury liability insurance and property damage liability insurance with available coverages which are less than the limits of the uninsured motorist coverage provided under the insured's insurance policy, but the motor vehicle shall only be considered to be uninsured for the amount of the difference between the available coverages under the bodilyinjury liability insurance and property damage liability insurance coverages on such motor vehicle and the limits of the uninsured motorist coverage provided under the insured's motor vehicle insurance policy; and, for this purpose, available coverages under the bodily injury liability insurance and property damage liability insurance coverages on such motor vehicle shall be the limits of coverage less any amounts by which the maximum amounts payable under such limits have, by reason of payment of other claims or otherwise been reduced below the limits of coverage; (iii) Bodily injury liability insurance and property damage liability insurance in existence, but the insurance company writing the insurance has legally denied coverage under its policy; (iv) bodily injury and property damage liability insurance in existence, but the insurance company writing the insurance is unable, because of being insolvent, to make either full or partial payment with respect to the legal liability of its insured, provided that, in the event that a partial payment is made by or on behalf of the insolvent insurer with respect to the legal liability of its insured, then the motor vehicle shall only be considered to be uninsured for the amount of the difference between the partial payment and the limits of the uninsured motorist coverage provided under the insured's motor vehicle insurance policy; or (v) No bond or deposit of cash or securities in lieu of bodily injury and property damage liability insurance." O.C.G.A. § 33-7-11(b)(1)(D).

Additionally, a motor vehicle shall be "deemed to be uninsured if the owner or operator of the motor vehicle is unknown. . . . and, in order for the insured to recover under the endorsement where the owner or operator of a motor vehicle which causes bodily insurance or property damage to the insured is unknown, actual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the personal property of the insured. Such physical contact shall not be required if the description by the claimant of how the occurrence occurred is corroborated by an eyewitness to the occurrence other than the insured. O.C.G.A. § 33-7-11(b)(2).

The classic uninsured motorist is the situation where neither the offending driver nor the vehicle he was operating is insured. This situation is fairly easy to handle. Assuming legal liability against the offending driver, the uninsured motorist coverage purchased by the injured party pays the judgment up to any applicable coverage limits.

WHAT IS AN "UNDERINSURED" VEHICLE?
A little more difficult is the situation where the offending driver or motor vehicle is "underinsured." In those cases, the offending driver or motor vehicle is considered to be uninsured to the extent they are underinsured. The amount of available uninsured motorist coverage is determined only after subtracting out any and all available underlying coverage. "[T]he motor vehicle shall only be considered to be uninsured the amount of the difference between the available coverages under the bodily injury liability insurance and property damage liability insurance coverages on such motor vehicle and the limits of the uninsured motorist coverage provided under the insured motor vehicle insurance policy; and, for this purpose, available coverages under the bodily injury liability insurance and property damage liability coverages on such motor vehicle shall be the limits of coverage less any amounts by which the maximum amounts payable under such limits of coverage have, by reason of payment of other claims or otherwise, been reduced below the limits of coverage." O.C.G.A. § 33-7-11(b)(1)(D)(ii). See also, Spence v. State Farm Mutual Auto. Ins. Co., 136 Ga. App. 436, 221 S.E. 2d 643 (1975).

COVERAGE DENIALS
Under the "coverage denial" classification, two (2) rather interesting cases occasionally occur. First, there are those cases where the offending driver is known, but cannot be located and served. In these cases, the offending driver is deemed to be uninsured since his automobile liability insurance carrier has no obligation to pay benefits in the absence of a judgment against the person of the offending driver. This is despite the fact that coverage very clearly exists. Smith v. Commercial Union Assurance Co., 246 Ga. 50, 268 S.E.2d 632 (1980). Another example is where an alleged tort-feasor has left the state without being served and cannot be located, the tort-feasor may then be served by publication, after which UM benefits become available. Since service by publication will not create an obligation on the part of the tort-feasor's insurance carrier to pay an adverse judgment, the only coverage available will be the claimant's UM coverage.

One last example is where the offending driver is known and has been served, but the underlying liability coverage limits have been previously exhausted by payments made to other parties injured in the same accident. In this situation, the offending driver is again uninsured. Then, of course, there is also the situation where the culpable driver has coverage, but his insurer denies coverage because of a policy exclusion, etc. In this case, the culpable driver is "uninsured" only if the denial can be legally sustained.

PHANTOM VEHICLES
John Doe or phantom vehicle accidents can also create an obligation to pay uninsured motorist benefits. These situations are, however, somewhat different because of statutory notice provisions. O.C.G.A. § 33-7-11(c) provides that "if the owner or operator of any motor vehicle which causes bodily injury or property damage to the insured is known, the insured or someone on his behalf or, in the event of a death claim, someone on behalf of the party having the claim, in order for the insured to recover under the endorsement (UM) shall report the accident as required by O.C.G.A. § 40-6-273. This basically means that a report must be filed with the Commissioner of Public Safety within ten (10) days of the accident in the event the accident is not investigated by a law enforcement officer. O.C.G.A. § 33-7-11(b)(2)(c).

The above statutory provision does not necessarily mean that the insured's failure to file a report with the Commissioner of Public Safety bars any subsequent action against his uninsured motorist carrier. Instead, the failure to file a report only results in the abatement of the insured's right to seek recovery of uninsured motorist benefits so long as a report is later filed within the applicable two (2) year statute of limitation. If on the other hand, the statute of limitations expires before a report is filed, the injured party may be barred from a recovery. See, Jones v. Doe, 143 Ga. App. 451, 238 S.E.2d 555 (1977).

PHYSICAL CONTACT
Other statutory conditions are necessary for a recovery where a phantom vehicle or Joe Doe motorist is involved. With a John Doe "phantom" vehicle, there must be physical contact between the phantom vehicle and the person or property of the claimant before UM coverage is available. Physical contact is not required if the description by the claimant of how the accident occurred is corroborated by an eyewitness to the occurrence other than the claimant. Bell v. Coronet Ins. Co., 197 Ga. App. 211, 398 S.E.2d 242 (1990). Where there is no contact, the claimant's version of the accident, which includes a phantom vehicle, must be corroborated by an "eyewitness" description. An "eyewitness" is someone who saw the accident. Someone who came up just after the accident, or heard the impact but did not see the accident, may not be sufficient. See, Fisher v. Clarendon Nat'l Ins. Co., 210 Ga. App. 711, 437 S.E.2d 334 (1993), where the Court of Appeals held that the res gestae evidentiary rule does not satisfy the "eyewitness" requirement to recover uninsured motorist coverage where a phantom vehicle was involved. In this particular case, the plaintiff was injured as a result of gunshots fired from a "phantom" vehicle. The Court held that the testimony of a witness, who came up after the accident, about the plaintiff's condition and what he told her about the occurrence after it happened was not sufficient to corroborate the plaintiff's claim.

EYEWITNESS CORROBORATION
Where the claimant's version of the accident does not include a phantom vehicle, eyewitness testimony of the phantom vehicle's involvement has been held insufficient to establish a claim for UM benefits. Likewise, a mere allegation by the claimant in his complaint of the involvement of a phantom vehicle is not sufficient to warrant the payment of uninsured motorist benefits. Carter v. Bennett, 220 Ga. App. 128, 469 S.E.2d 279 (1996). In this particular case, the claimant, who filed a suit against a known tort-feasor and a John Doe, was not able to describe the accident as having been caused by an unknown vehicle, since the only vehicles he remembered were his own and that of the known tort-feasor. Because the claimant's description did not include a "phantom" vehicle, uninsured motorist coverage was not available. See also, Langford v. Royal Indem. Co., 208 Ga. App. 128, 430 S.E.2d 98 (1993), where the Court of Appeals held that an alternative allegation contained in a Complaint constituted nothing more than a speculative allegation of how an accident "may have" occurred and was not sufficient for a recovery of uninsured motorist coverage.

Two claimants can act as each other's eyewitness in establishing separate UM claims. For example, a passenger and a driver in a car, which is forced off the road by a phantom vehicle and strikes a tree, may corroborate each other's description of the accident. A husband and wife may even corroborate each other's claim to recover uninsured motorist benefits. American Ambassador Cas. Co. v. Cash, 213 Ga. App. 606, 445 S.E.2d 364 (1994).

The corroborating testimony from an eyewitness need not be identical to the description provided by the claimant where a phantom vehicle is involved and there has been no physical contact. In fact, an eyewitnesses testimony may even contradict the claimant's description of the accident so long as it sufficiently "corroborates" the involvement of the phantom vehicle. Meredith v. Nationwide Mut. Fire Ins. Co., 215 Ga. App. 286, 450 S.E.2d 322 (1994). What is required is that the eyewitness' testimony corroborate the claimant's description in "its material allegation, i.e., implication of the unidentified vehicle as a causal factor in the underlying occurrence . . .." Ibid at 287. So long as the claimant produces an eyewitness whose testimony includes the existence of the phantom motor vehicle and who further implicates the phantom vehicle of a causal factor in the underlying occurrence, the evidentiary requirements of O.C.G.A. § 33-7-11(b)(2) will typically be met. Circumstantial evidence is not, however, sufficient to constitute "eyewitness" corroboration. Bone v. State Farm Mut. Ins. Co., 215 Ga. App. 782, 458 S.E.2d 523 (1994). For example, an affidavit from the owner of a body shop that he had painted the plaintiff's car sometime prior to the accident and that, after the accident, he saw body damage on the car, which had not been there at the time of the paint job, was not sufficient to constitute eyewitness corroboration. Ibid. at 783. See also, Murphy v. Georgia General Ins. Co., 208 Ga. App. 501, 431 S.E.2d 147 (1993).

Another factor to be considered in phantom vehicle cases is whether there has been physical contact with a "motor vehicle." This is what is required by the Code section, which states: "[A]ctual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured." O.C.G.A. § 33-7-11(b)(2). For example, physical contact is not established where the claimant describes an accident involving his vehicle and a pipe, which he believed to have fallen as loose cargo from another vehicle. The pipe was not "a component or integral part" of the unknown vehicle. Murphy v. Georgia General Ins. Co., 208 Ga. App. 501, 431 S.E.2d 147 (1993). Likewise, a tire assembly was not a self-propelled vehicle nor a vehicle having more than three wheels to the extent that physical contact is required with a "motor vehicle." State Farm Fire & Cas. Co. v. Guest, 203 Ga. App. 711, 417 S.E.2d 419, cert. denied 203 Ga. App. 907, 417 S.E.2d 419 (1992).

One last thing, which needs to be recalled, is that some policies do not track the statute and do not specifically state that eyewitness corroboration is required for a recovery of uninsured motorist benefits in phantom vehicle cases where there has been no physical contact. In such cases, the eyewitness corroboration rule cannot be relied upon by an insurance company to deny UM coverage. Although the statute requires eyewitness corroboration, the Courts will find that the insurance company has waived this particular requirement by not including the pertinent language in its policy. Walker v. United Servs. Auto Assoc., 205 Ga. App. 693, 423 S.E.2d 299 (1992).

PROCEDURAL ISSUES
Typically, an insured must obtain a judgment against the uninsured motorist before he is entitled to recover uninsured motorist benefits. One exception is where the UM carrier has been served and has filed an Answer in its own name. In these cases, the insured may recover a judgment in the underlying tort action against the uninsured motorist and the UM carrier at the same time. See, Moss v. Cincinnati Ins. Co., 154 Ga. App. 165, 268 S.E.2d 676 (1980).

One somewhat unusual situation arises where the uninsured motorist is known, but cannot be located and served. In these cases, a claimant, after showing that he has made a diligent effort to locate and serve the alleged tort-feasor, may serve the tort-feasor by publication and then seek to recover uninsured motorist benefits from his UM carrier. In these cases, the tort-feasor is "uninsured" to the extent that the tort-feasor's insurance carrier has no obligation to defend or pay a judgment on behalf of the tort-feasor unless the tort-feasor is personally served, so that an in personam judgment can be recovered. State Farm Mut. Auto. Ins. Co. v. Noble, 208 Ga. App. 518, 430 S.E.2d 804 (1993).

BAD FAITH PENALTIES
Although an insured is not entitled to recover uninsured motorist benefits until he has established that an uninsured motorist is legally liable to pay damages, the insured may make a pre-litigation demand for payment of UM coverage and, in some limited cases, recover a bad faith penalty in the event the UM carrier does not pay the claim within 60 days. "If the insurer shall refuse to pay any insured any loss covered by this Code section within 60 days after demand has been made by the insured, and a finding has been made that such refusal was made in bad faith, the insurer shall be liable to the insured in addition to any recovery under this Code section for than more than twenty-five (25%) percent of their coverage and all reasonable attorney's fees for the prosecution of the case under this Code section. O.C.G.A. § 3-7-11(j).

What this particular Code section requires is that the UM carrier "consider" the merits of any claim for payment of UM benefits, whether a judgment has been rendered against an uninsured motorist. "Good faith" is also required. As with other first party bad faith claims, if there is any reasonable ground for the insured to contest the UM claim, there is no basis for a finding of bad faith. State Farm Mut. Auto. Ins. Co. v. Harper, 125 Ga. App. 696, 188 S.E.2d 813 (1972). Likewise, the mere refusal of the UM carrier to settle the claim does not constitute bad faith. Jones v. Southern Home Ins. Co., 135 Ga. App. 385, 217 S.E.2d 620 (1975).

O.C.G.A. § 33-7-11(j) provides that any issues concerning the insurer's failure to pay a UM claim and a possible award of bad faith damages and attorney's fees shall be considered in a separate action filed by the insured against the insurer after a judgment has been rendered against the uninsured motorist. State Farm Mutual Auto. Ins. Co. v. Lorenz, 202 Ga. App. 123, 413 S.E.2d 782 (1991). This is to protect the insurance company from the prejudicial mention of insurance coverage during the trial of the underlying tort case. Lewis v. Cherokee Ins. Co., 258 Ga. 839, 840, n. 2, 375 S.E.2d 850 (1989).

WHAT CAN BE RECOVERED?
The damages which can be recovered in the form of UM coverage are limited to damages for bodily injury, death, and property damage. Punitive damages cannot be recovered. See, State Farm Mutual Auto. Ins. Co. v. Weathers, 193 Ga. App. 557, 338 S.E.2d 393, rev'd 260 Ga. 123, 392 S.E.2d 1 (1990); Roman v. Terrell, 195 Ga. App. 219, 393 S.E.2d 83 (1990). In other words, only compensatory damages can be recovered in the form of UM benefits. The rationale being that punitive damages are intended to punish tort-feasors so that payment of punitive damages by the injured party's uninsured motorist carrier defeats the statutory purpose.

WHO IS PRIMARY?
Another issue which often comes up in UM cases concerns primary versus secondary coverage. Under Georgia law, automobile liability insurance generally follows the car. The situation with UM coverage is, however, different. With UM coverage, the company with the primary obligation to pay benefits is the company who received the premium dollar from the injured party. Georgia Farm Bureau Mutual Ins. Co. v. State Farm Mutual Auto Ins. Co., 255 Ga. 166, 336 S.E.2d 237 (1985). This means that a passenger, who is injured while riding in the car of another, would look to his personal carrier, if available, for uninsured motorist coverage. The UM coverage provided to the car, in which the claimant is riding, would be secondary.

Where the injured party has not paid a premium to either of two UM carriers, both of which are obligated to pay benefits, the court will use the "more closely identified with" test. Travelers Indemnity Co. v. Maryland Casualty Co., 190 Ga. App. 455, 369 S.E.2d 183 (1989). In this particular case, the injured party was employed by and was provided with a company-owned car for her use while on company business. In addition, the injured party lived with her mother and was a resident relative under a policy of insurance purchased by the mother. The accident at issue arose while the employee/daughter was operating the company-owned car. The question then became whether or not Travelers (employer) or Maryland Casualty (mother) was primary. The decision of the Court of Appeals was that Maryland Casualty was primary since the claimant was an insured under the mother's policy at all times as a resident relative, regardless of whether or not she was operating an insured vehicle. Under the Travelers' policy, the claimant was only an insured while operating the insured (company) vehicle. In other words, the claimant was "more closely identified with" her mother's policy. Interestingly enough, the existence of an "other insurance provision" in an uninsured motorist policy does not preempt application of either the "receipt of premium" rule or the "more closely identified with" rule.

STACKING
Stacking UM coverage is not particularly difficult or complex where only one UM policy is available. In such cases, the claimant can recover an amount equal to the excess of the applicable UM coverage over the underlying liability coverage provided to the tort-feasor. Where more than one policy is involved, the situation becomes a little more difficult. Where more than one UM policy is available, all UM coverage is totaled before subtracting out the available underlying liability coverage. The difference is the amount of UM coverage available to the claimant. Confusion arises here, on occasion, because quite often a secondary UM carrier, and not the primary UM carrier, will get the benefit of the write-off for the underlying liability coverage.

STATUTE OF LIMITATIONS
To be on the safe side, an uninsured motorist carrier should be served within the original 2-year statute of limitations in order to recover UM benefits. In fact, the Georgia Court of Appeals has stated that "[i]t behooves a plaintiff who suffers injury as a result of the operation, maintenance or use of a motor vehicle to have his UMC (uninsured motorist carrier) served with a duplicate original of the action filed against the owner/operator of the injury-causing motor vehicle at the time the action against the owner/operator is filed, in order to protect his ability to collect insurance proceeds from the UMC should the tort-feasor be or become an uninsured motorist (at a later time after the statute has expired). Bohannon v. Futrell, 189 Ga. App. 340, 342, 375 S.E.2d 637 (1988) (explanation added).

In cases where the UM carrier is served within the statute of limitations but there does not appear to be much likelihood of UM exposure, claimants are often willing to dismiss their action against the UM carrier "without" prejudice upon condition that the UM carrier agrees to waive the applicable statute of limitations in the event the alleged tort-feasor suddenly becomes uninsured or under-insured.

An exception to the requirement that a UM carrier needed to be joined within the 2-year statute of limitations was created in Stout v. Cincinnati Ins. Co., 236 Ga. 534, 502 S.E.2d 226 (1999). Here, the Supreme Court held that an uninsured motorist carrier may be served with a renewal action outside the statute of limitations, even where the UM carrier was not named, and served in the original action. In this particular case, Elva Stout was injured in an automobile accident and subsequently filed suit against the driver and owner of the other vehicle, but did not name or serve her UM carrier, Cincinnati Insurance Company. After the 2-year statute of limitations had expired, Ms. Stout discovered that the defendant's liability insurance company was insolvent and dismissed the original Complaint. A second Complaint was then filed within the 6-month renewal period authorized by O.C.G.A. § 9-2-61(a). This time around, Ms. Stout joined and served her UM carrier, Cincinnati Insurance Company, with a copy of the Complaint. After the trial court granted a motion to dismiss based on expiration of the statute of limitations, which was affirmed by the Georgia Court of Appeals, the Georgia Supreme Court granted certiorari. The issues before the Supreme Court were (1) whether the statute of limitations for serving a UM carrier should be the same as that for serving the defendant, even though the defendant does not qualify as an uninsured motorist under the statute until after the applicable statute of limitations has expired; and (2) whether service of an uninsured motorist carrier with the original action is necessary in order to allow for service in a properly filed renewal action.

The first question was answered in the affirmative, and the second was answered in the negative. Therationale was that O.C.G.A. § 33-7-11(d) does not require service of an uninsured motorist carrier for the purpose of making the UM carrier a party to the underlying tort action; instead, service merely notifies the UM carrier of the existence of a lawsuit in which it ultimately "may" be held financially liable. Since the purpose of service on the UM carrier is simply to provide notice of the pendency of the lawsuit, rather than to establish personal jurisdiction over the UM carrier, it is the validity of the service of the underlying lawsuit on the alleged tort-feasor, which controls. Where the alleged tort-feasor is validly served within the applicable statute of limitations, it follows that the UM carrier can also be served outside the statute of limitations in a valid renewal action.

The earlier case law that UM carriers "absolutely" needed to be served within the applicable 2-year statute of limitations has been reversed by statute. O.C.G.A. § 33-7-11(d) provides that "if facts arise after an action has been commenced which create a reasonable belief that a vehicle is an uninsured motor vehicle . . . and no such reasonable belief existed prior to commencement of the action against the defendant, and the Complaint was timely served on the defendant, the insurance company issuing the policy shall be served within either the remainder of the time allowed for valid service on the defendant or 90 days after the date on which the parties seeking relief discovered, or in the exercise of due diligence, should have discovered that the vehicle was uninsured or underinsured, whichever period is greater. This Code section may cut down on the instances in which a UM carrier is served merely as a precaution by a claimant who otherwise believes that sufficient underlying coverage is available.

ANSWERING THE COMPLAINT
In answering a complaint, in which the UM carrier has been served, an answer can be filed in the name of the UM carrier, or in the name of the alleged uninsured motorist. Where an answer in the company's name, all coverage issues must be raised in the immediate suit. Where an answer is filed in the name of the alleged uninsured motorist, coverage issues between the company and its insured can be deferred until after conclusion of the underlying liability suit.

The insurer's filing of defensive pleadings, either in its name or in the name of the alleged tort-feasor, does not constitute an admission of liability or establish that coverage exists. Instead, the claimant must still prove that the alleged uninsured motorist is "legally liable" to pay damages. When the UM carrier files an Answer in its name, the UM carrier has a right and duty to contest both the underlying liability of the alleged tort-feasor and any coverage defenses which it may have. Hall v. Regal Ins. Co., 202 Ga. App. 511, 414 S.E.2d 669 (1991).

SUBROGATION
One last issue is that of subrogation. O.C.G.A. § 33-7-11(f) states that "an insurer paying a claim under the endorsement or provisions required by subsection (a) of this Code section shall be surrogated to the rights of the insured to whom the claim was paid against the person causing such injury, death or damage to the extent that the payment was made, including the proceeds recoverable from the assets of the insolvent insurer, provided that the bringing of an action against the unknown owner or operator as "John Doe," inclusion of such action shall not constitute a bar to the insured, if the identity of the owner or operator who caused the injury or damages complained of becomes known, bringing an action against the owner or operator theretofore proceeded against as "John Doe" . . ."

Despite this Code section, UM carriers cannot recover a subrogation unless and until the insurer has been "fully compensated for all economic and non-economic losses." While this principle has always acted as somewhat of a limit to an insurance company's right to recover subrogation, it became a far bigger obstacle with the decision of the Georgia Supreme Court in Duncan v. Integon General Ins. Co., 267 Ga. 646, 482 S.E.2d 325 (1997).

While the ability of a UM carrier to recover subrogation has always been somewhat limited to the extent that subrogation was not available until the insured had been "fully compensated for any and all losses, both economic and non-economic," the right of subrogation was virtually taken away in the Georgia Supreme Court's decision in Davis v. Kaiser Foundation Health Plan of Georgia, Inc., 271 Ga. 508, ____ S.E.2d _____ (1999). In this particular decision, the Georgia Supreme Court stated that "it is now clear that the public policy of this State will not permit insurers to require an insured to agree to a provision that permits the insurer, at the expense of the insured, to avoid the risk for which the insurer has paid by requiring the insured to reimburse the insurer whether or not the insured was completely compensated for his covered loss."

Although Davis was not a UM case, but was instead a case in which reimbursement for healthcare benefits was being sought, it's holding that the public policy of Georgia prohibits subrogation except where the claimant has been fully and completely compensated, will be applicable to UM subrogation cases. See, Duncan v. Integon General Ins. Corp., 267 Ga. 646, 482 S.E.2d 325 (1997), wherein the Georgia Supreme Court granted certiorari to consider whether the complete compensation rule, which requires that an insured be completely compensated for his losses before his insurer can exercise a right of subrogation for reimbursement, is applicable to an insurance policy provision which requires the insured to reimburse the insurer for amounts paid until medical payments coverage. "We hold that, consistent with the public policy of Georgia, the complete compensation rule does limit the applicability of such a reimbursement provision, at least where the insurance contract does not contain the express provision to the contrary." Ibid. at 646. See also, Hawkins v. Travelers Ins. Co., 162 Ga. App. 231, 290 S.E.2d 348 (1982), wherein the Georgia Court of Appeals stated that "[i]f the responsible tort-feasor is uninsured and is not a self-insurer, the insurer or self-insurer providing benefits shall have a right of action to the extent of benefits provided against tort-feasor only in the event that the person for whom benefits are provided has been fully compensated for all economic and non-economic losses incurring as a result of the motor vehicle accident."